Rocket Companies, Inc.

Good day, and welcome to the Rocket Companies Incorporated third quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I'd now like to turn the conference over to Sharon Ng, head of investor relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us for Rocket Company's earnings call covering the third quarter of 2021. With us this afternoon are Rocket Company's CEO, Jay Farner, our CFO, Julie Booth, and our President and COO, Bob Walters. Before I turn things over to Jay, let me quickly go over our disclaimers. On today's call, we provide you with information regarding our third quarter 2021 performance, as well as our financial outlook. This conference call includes forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and the assumptions we mentioned today. We encourage you to consider the risk factors contained in our SEC filings for a detailed discussion of these risks and uncertainties. We undertake no obligation to update these statements as a result of new information or further events, except as required by law. This call is being broadcast online and is accessible on our IR website. A recording of the call will be available later today. Our commentary today will also include non-GAAP financial measures. Reconciliations between GAAP and non-GAAP metrics for reported results can also be found on our earnings release issued earlier today, as well as our filings with the SEC. And with that, I'll turn things over to Jay Farner to get us started. Jay?

Good afternoon and welcome to the Rocket Company's earnings call for the third quarter of 2021. Before we dive in, I want to take a moment to thank our Rocket Companies team members, all 26,000 dedicated professionals whose passion drives the client service, innovation, and entrepreneurial spirit that our company is known for. Thanks to them, we have become a platform that removes friction from life's most complex moments. Our platform continues to execute at scale and grow across our businesses. Rocket Mortgage is the largest mortgage lender in America with industry-leading profitability. Our title and settlement services business, Amrock, is also the largest of its kind in the country. Our emerging businesses also set new records in the quarter. Rocket Homes reached $2.3 billion in real estate transaction value, and its current annualized run rate would place the company among the top 20 brokerages in the country. Rocket Auto also reached a record $530 million in gross merchandise value in the quarter. The number of vehicle sales facilitated by Rocket Auto in the last 12 months would put the company in the top 10 of all used car dealers nationwide. On today's call, I will highlight the flexibility of the Rocket platform to capture the growth ahead, including our strategy to revolutionize the home buying experience. I'm also excited to touch on the new mortgage as a service opportunity we're launching in partnership with Salesforce. Last quarter, we had excellent results with closed loan volume and gain on sale margin exceeding the top end of our guidance range. Rocket Mortgage delivered $88 billion in closed loan volume and Rocket Companies generated $3.2 billion in adjusted revenue and $1.6 billion in adjusted EBITDA. On an adjusted EBITDA basis, we doubled the size of our business compared to 2019, again demonstrating the sheer power and scalability of the Rocket platform. We hit new records in both purchase and cash out refi volume in Q3. We've also just recently announced a major partnership with Salesforce. Up to this point in time, we have used Rocket technology to process our own mortgage volume through both our direct-to-consumer and partner network channels. The Salesforce partnership will now open our mortgage technology and process to third-party financial institutions through the Salesforce Financial Services Cloud. This new mortgage-as-a-service model is a game-changer for the industry and for Rocket. More than simply leveraging our technologies, these banks and credit unions will have Rocket integrated into their centralized workflow. making the process seamless and simple. The opportunity is massive. In 2020, the approximately 10,000 banks and credit unions originated over $1 trillion in mortgages. That represents nearly a third of the total market in the U.S. We believe Mortgage as a Service represents a new model for financial institutions to partner with Rocket, paving the way for an even larger opportunity to provide consumer lending as a service. including mortgages auto loans and personal loans expect to hear more about this partnership in the first half of 2022 with multiple channels all operating at scale over a broad range of products we have many levers to drive growth while optimizing gain on sale margins even in shifting markets our ability to pivot and scale is rocket's key differentiator in fact in the third quarter we saw strong growth in our direct consumer channel where our purchase initiatives continue to gain traction. We will be allocating additional resources to further support this growth. More broadly, we've seen strength in products that aren't as interest rate sensitive. In the third quarter, both purchase and cash out refinancing hit new company records, rising approximately 70% year over year. This growth is a direct result of Rocket's commitment to providing speed, certainty, and choice to our clients. all of which are crucial in the ongoing inventory-constrained, highly competitive housing market. Not only did we set a record for purchase volume in the third quarter, with both our direct-to-consumer and partner channels achieving all-time highs, but by the end of September, we had already originated more purchase volume than any full year prior. This rapid growth in the purchase segment puts us well on our way to reaching our goal of becoming the number one retail purchase lender by 2023. Helping drive our continued growth in the purchase category is our seamless end-to-end home buying ecosystem in partnership with Rocket Homes. Through our integrated platform, clients can find their next house on Rocket Homes 50-state home listing search platform, secure an agent from the company's agent network, get financing through Rocket Mortgage, have AMROC conduct the title work and appraisal for them, and then after closing, have their mortgage serviced by Rocket Mortgage, all from one centralized platform. Other key drivers helping us win in today's purchase market are industry-leading products like our overnight underwrite and a broad range of home buying and selling services. For instance, Rocket Homes offers the choice to sell your home through its on-staff agents, its 50-state network of real estate professionals, or through its for-sale-by-owner platform. Additionally, we recently rolled out our Breaking Barriers program for our Rocket Pro TPO partners. These technology enhancements paired with programming to better connect real estate professionals and mortgage brokers are designed to give our partners the tools that they need to win today and well into the future. As we look ahead to the next year, we expect our Rocket Mortgage business to achieve continued market share growth, exceeding 10% share in a purchase heavy market. This is consistent with our track record of being opportunistic to grow share. For instance, in 2019, our company's mortgage originations accounted for roughly 6.5% of the market. In 2020, that grew to nearly 8.5%. With the fourth quarter guidance released earlier today, which Julie will walk through in more detail, we are well on pace to break 2020's strong origination record of $320 billion and end the year with 9.5% market share. As we look towards 2022, we will continue to invest in the rapid growth of our platform, delivering a unified client experience across mortgage, real estate, auto, personal loans, and solar. In our emerging businesses, we expect continued growth from Rocket Auto and Rocket Homes in 2022, on top of the records reached in 2021. We will also formally launch our solar program and continue to target new product categories to add to the Rocket platform, either organically or through acquisition. Our platform has been built to capitalize on the vast data, proprietary technology, trusted brand, and cloud force here at Rocket Companies. We find over decades these pillars of our platform are the foundation of our growth ahead. With that, I'll turn things over to Julie to go deeper into the numbers. Julie?